What does Brexit mean for work?

Now the UK has formally left the European Union, Alan Lockey and Jack Layton look at how Brexit will affect labour rights and good work policy.

It’s finally happened: the UK has left the European Union.  

We now enter the limbo period of the transition phase and have until the end of 2020 to negotiate our future relationship with the EU. That is, to put it mildly, an ambitious deadline; a disentangling of over four decades’ worth of agreements in less than a single year. Vast swathes of the regulatory public realm – trade, migration, agriculture, technology, human rights, security, the environment – will now be subject to detailed negotiation and are therefore politically up for grabs.  

Let’s look at what this almighty task might mean for workers’ rights.  

How has EU membership affected work in the UK?  

To answer this, we need to understand the three distinct ways our EU membership has affected British labour rights: labour law, equality law directives and European Court of Justice (ECJ) rulings.  

As a recent Institute of Employment Rights report explores in depth, the UK’s EU membership has primarily impacted our equalities legislation, the regulation of atypical work, working time and conditions regulation, and the rights of workers during business restructuring. In practice, this means that on issues such as unfair dismissal, equal pay, equal opportunities, protected paid holiday and working conditions, it is EU institutions that currently underpin British workers’ rights. When businesses fail to meet these standards, British citizens have had the opportunity to seek ECJ rulings to enforce compliance.  

On the other hand, in some areas the UK exceeds the minimum requirements set out by the EU. In particular, the UK offers workers and employees more generous entitlements on paid paternity, maternity and annual leave, whilst also offering a guaranteed minimum wage and sick pay entitlements (neither of which are statutory rights in EU law).  

It is perhaps best to imagine the EU’s impact as enforcing and maintaining a minimum floor for working conditions. In the above areas the UK has exceeded what it needed to do to comply with EU labour rights. In others – such as the Working Time Directive, which placed limits on maximum working hours – compliance was arguably enforced despite UK concerns or resistance. Leaving the EU will mean this floor no longer exists for the UK.  

For better or worse, it will solely be the UK government that will determine working conditions in the UK, both in terms of its own legislation and the standards it signs up to voluntarily through future trade agreements. 

So, what could change?  

This is where the waters begin to muddy. Negotiations always bring uncertainty, but so vast is the scope here that they could affect almost everything or nothing. What we do know, however, is that the UK has explicitly identified labour regulations (along with tax, environmental and climate regulation, competition policy and subsidies) as one of the areas where it is particularly keen to set its own standards.  

This represents a significant shift in the politics of Brexit since Boris Johnson’s arrival in Number 10: Theresa May’s proposed withdrawal agreement pointed towards a future relationship where regulatory alignment in these areas was baked in. The practical differences may not be too substantive – the UK recently confirmed its commitment to “high standards” in its proposed approach to negotiations. Moreover, dealignment will be vigorously contested by the EU, which has identified “labour and social rights” as one of the key areas where it will seek legal guarantees of “a level playing field”.  

Nevertheless, the scope for long-term dealignment on workers’ rights would appear to be a key British negotiating objective, with the announcement of an “Employment Bill” in the recent Queen’s Speech perhaps the intended legislative vehicle for realising it (along with other domestic labour objectives, such as the creation of a Single Enforcement Body).  

One important area that may receive less attention is the demands new technologies make on regulation. The key example here is GDPR – a landmark piece of regulation that gives EU citizens’ rights over their personal data. GDPR is now beginning to be used as the basis for labour disputes – for example, by gig economy workers to demand access to the personal data held by platform businesses like Uber. The UK government’s negotiating position is less clear on this – it commits to a “separate and independent” UK policy standards on data protection but does not emphasise it as vehemently as it does with labour policy more broadly, perhaps suggesting it is less of a red line. Furthermore, the withdrawal agreement makes provisions for incorporating GDPR into the future relationship agreement – so this may be one area where, in practice, dealignment turns out not to materially affect standards.  

The more difficult question to answer is whether the UK government, without the collective strength of the EU, would have developed a GDPR-style law in the first place, given the fierce opposition from the big tech giants. The government’s commitment to implementing a unilateral Digital Services Tax could be a good test case of its broader determination on this front.  

Finally, there is one right that we can be certain all British workers will lose – the right to work and live in the European Union without fulfilling any other immigration criteria. Clarifying what criteria European citizens must satisfy to come – and more urgently, to stay – in Britain remains a task of profound importance for the government.  

What political factors might affect the eventual outcome?  

Putting aside ideological factors (such as, for example, a maximal view on parliamentary sovereignty), one major factor driving the government’s desire for dealignment is surely its determination to strike new global trade agreements – with the US especially. Much has been made about the fear of chlorinated chicken – but the key implication of the government’s negotiating stance is that it also views labour standards as an area crucial to US (or indeed any other) trade negotiations. This means the state of Anglo-US relations, not to mention the US presidential election later this year, could take on an unusual importance for workers’ rights in the UK.  

However, other manifesto commitments might also push the government towards what could be termed ‘deregulatory’ dealignment. For example, the government has committed to creating “up to ten freeports” – deregulated, tax and tariff-free economic zones that aim to attract trade and business in international goods processing. It is possible that enabling legislation for these zones – which would likely sit outside any future trade agreement – might seek competitiveness by undercutting existing labour rights and working conditions. 

Perhaps the key political consideration, however, is just how seriously the government takes its responsibilities to ‘level up’ prosperity for the new Conservative voter coalition. The 2019 general election saw the tectonic plates of British politics shift: the Conservatives now represent seats in parts of the country where they have not won for generations, or indeed ever. The consensus view in Westminster is that this voter coalition might look favourably upon industrial activism – and certainly the government is making activist noises on investment in infrastructure and research. 

This might provide some degree of comfort for those concerned that dealignment necessarily means deregulation or a rowing back of labour standards. As a recent RSA and Carnegie UK Trust publication underlined, there is a positive relationship between good work and the higher productivity that must underpin any successful industrial strategy. Moreover, this relationship is strongest for lower quality work, ie reforming bad work might see the highest productivity gains. As Andy Haldane, Chief Economist of the Bank of England, has put it “productivity gains would be largest if a minimum set of thresholds for work were to be met - ‘minimum work’ rather than minimum wage standards”.  

This should act as both an economic and political constraint on the government’s Brexit negotiations. For whether we get there through the UK-EU future relationship or via new sovereign UK standards, ‘levelling up’ means we must not level down on good work.